City's property boom continues with prices up 20%

HOUSE prices continue to rise in Chelmsford as demand outweighs supply.

Figures have revealed there is a specific lack of three bed semi-detached homes in the city, fuelling a 20 per cent price rise in the last year.

On average, a three bed semi now costs £300,000 in the city, up from £250,000 in June 2013.

Experts say this is down to the average age of first time buyers being in their midthirties who have started to have families, so are skipping the first rung on the housing ladder and buying a bigger property.

They say the government’s help to buy scheme is also helping to fuel the demand.

Chelmsford MP Simon Burns said people’s desire to live in Chelmsford was a major factor in the price rise, but feels developments such as Beaulieu in the north of the city – which will see up to 3,600 new homes being built – will help release pressure on the challenging buyers’ market.

He said: “Rising house prices pose a significant challenge to those wanting to buy a home or those who need to move up the housing market.

“Supply does play a major factor in house prices, as well as the fact that Chelmsford is a highly sort out of city to live in.

“It’s within commuting distance of London, has excellent schools and relatively low crime rates. But the increase in house building especially in north east Chelmsford will release more housing onto the market in due course.”

Ash Moakes, a senior negotiator from William H Brown in Chelmsford, said the market has gone “absolutely crazy” for three-bed homes in recent months.

He said: “As soon as one comes available, 15 to 20 people want to see it without seeing the specs, and it’s gone within two weeks. They’re going for well over what they should be. People are panic buying whenever they come up.

“It’s due to demand, and the help to buy scheme. There are to many people looking for them and just not enough houses.”

Alex Beresford, assistant manager at Beresfords’ Chelmsford branch, said: "We are seeing first time buyers taking longer to get on the housing ladder so buying at a different stage of their life when they have families, but also second steppers looking to upsize with the equity they’ve accrued and buy-to-let investors, who prefer longer term family tenants.

"We have also witnessed a surge in migration from London and overseas investment, where people are looking to buy property either within commuting distance of the capital or the large employers, such as Broomfield Hospital."

Martin Gibbon, director of Essex-based Balgores Property Group, said there had been a big shift in demand from start homes such as flats to larger properties.

He added: “Over the last few years, the age of the first time buyer has increased, now standing at an average of 36 years old.

“First-time buyers are skipping the first rung of the ladder and opting for three bed semis, as by this time they tend to have families and need more space than what is offered by a typical starter home.”

In June, the Weekly News reported that rental prices in city had rocketed almost 37 per cent in the first quarter of the year, with an average property in Chelmsford costing £1,091 per month.

Experts said that new builds were pushing the prices up along with Chelmsford gaining city status in 2012.